Mail.Ru Group Limited Interim Condensed Consolidated Financial Statements. For the nine months ended September 30, 2018

Mail.Ru Group Limited Interim Condensed Consolidated Financial Statements For the nine months ended September 30, 2018

Contents Independent auditor s report... 3 Interim Condensed Consolidated Financial Statements: Interim Condensed Consolidated Statement of Financial Position... 4 Interim Condensed Consolidated Statement of Comprehensive Income... 5 Interim Condensed Consolidated Statement of Cash Flows... 6 Interim Condensed Consolidated Statement of Changes in Equity... 7 Notes to the Interim Condensed Consolidated Financial Statements... 9 Mail.Ru Interim Results 2018 2

Interim Condensed Consolidated Statement of Financial Position As of September 30, 2018 (in millions of Russian Roubles) Notes As at September 30, 2018 (unaudited) As at December 31, 2017 Restated (Note 5.1) * ASSETS Non-current assets Investments in equity accounted associates 5 2,819 1,013 Goodwill 5 140,700 133,038 Other intangible assets 6 21,203 25,042 Property and equipment 7 6,518 4,491 Financial assets at fair value through profit or loss 15 1,490 365 Deferred income tax assets 3,902 2,304 Other non-current assets 8 1,825 1,585 Total non-current assets 178,457 167,838 Current assets Trade accounts receivable 15 7,441 6,556 Prepaid income tax 79 27 Prepaid expenses and advances to suppliers 1,136 1,463 Financial assets at fair value through profit or loss 15 1,385 171 Other current assets 9 689 201 Cash and cash equivalents 15 10,079 15,371 Total current assets 20,809 23,789 Assets held for sale 16 47 Total assets 199,313 191,627 EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Issued capital Share premium 54,525 51,722 Treasury shares (286) (444) Retained earnings 111,152 114,676 Accumulated other comprehensive income/(loss) (75) 128 Total equity attributable to equity holders of the parent 165,316 166,082 Non-controlling interests 419 84 Total equity 165,735 166,166 Non-current liabilities Deferred income tax liabilities 2,832 2,520 Deferred revenue 9,295 6,736 Other non-current liabilities 15 245 Total non-current liabilities 12,127 9,501 Current liabilities Trade accounts payable 15 6,883 4,896 Income tax payable 351 525 VAT and other taxes payable 1,350 1,342 Deferred revenue and customer advances 8,265 6,295 Other payables, accrued expenses and contingent consideration liabilities 10, 15 4,360 2,902 Total current liabilities 21,209 15,960 Liabilities directly associated with the assets held for sale 16 242 Total liabilities 33,578 25,461 Total equity and liabilities 199,313 191,627 * Certain amounts shown here do not correspond to the 2017 financial statements and reflect adjustments made, refer to Note 5.1 Mail.Ru Interim Results 2018 4

Interim Condensed Consolidated Statement of Comprehensive Income For the three and nine months ended September 30, 2018 (in millions of Russian Roubles) Notes Three months ended September 30, Nine months ended September 30, 2017 2017 2018 (unaudited) 2018 (unaudited) (unaudited) Restated (Note 11) * (unaudited) Restated (Note 11) * Online advertising 11 7,716 5,467 21,583 15,161 MMO games 4,311 3,427 11,832 9,407 Community IVAS 11 3,016 3,793 10,312 9,798 Other revenue 1,274 495 3,191 1,454 Total revenue 16,317 13,182 46,918 35,820 Other operating gain 565 Net loss on venture capital investments 15 (23) (27) Personnel expenses (4,500) (3,064) (14,288) (8,974) Office rent and maintenance (618) (538) (1,840) (1,586) Agent/partner fees (3,916) (2,340) (11,502) (6,279) Marketing expenses (3,988) (2,406) (10,516) (6,340) Server hosting expenses (502) (462) (1,475) (1,339) Professional services (130) (73) (415) (236) Other operating expenses (784) (529) (2,067) (1,541) Total operating expenses (14,438) (9,412) (42,103) (26,295) EBITDA 1,879 3,770 4,792 10,063 Depreciation and amortisation (2,431) (2,281) (7,254) (6,641) Impairment of intangible assets 6 (23) (1,721) Share of (loss)/profit of equity accounted associates (224) (356) 16 Finance income 116 115 381 349 Finance expenses (16) (15) Other non-operating income/(loss) 24 35 19 (7) Net gain/(loss) on derivative financial assets and liabilities at fair value through profit or loss 15 185 (102) 580 (20) Impairment losses related to equity accounted associates (28) (273) Net loss on disposal of shares in subsidiaries (40) (40) (15) Net foreign exchange gain 297 97 606 673 (Loss)/profit before income tax expense (217) 1,606 (3,009) 4,130 Income tax expense 12 (45) (173) (490) (1,018) Net (loss)/profit (262) 1,433 (3,499) 3,112 Attributable to: Equity holders of the parent (277) 1,425 (3,524) 3,099 Non-controlling interest 15 8 25 13 Other comprehensive loss that may be reclassified to profit or loss in subsequent periods Exchange differences on translation of foreign operations: Differences arising during the period (138) (59) (203) (295) Total other comprehensive loss net of tax effect of 0 (138) (59) (203) (295) Total comprehensive (loss)/income, net of tax (400) 1,374 (3,702) 2,817 Attributable to: Equity holders of the parent (415) 1,366 (3,727) 2,804 Non-controlling interest 15 8 25 13 Earnings per share, in RUR: Basic (loss)/earnings per share attributable to ordinary equity holders of the parent (1) 7 (17) 15 Diluted (loss)/earnings per share attributable to ordinary equity holders of the parent (1) 7 (17) 14 * Certain amounts shown here do not correspond to the interim condensed financial statements for the three and nine months ended September 30, 2017 and reflect full retrospective application of IFRS 15, refer to Note 11. Mail.Ru Interim Results 2018 5

Interim Condensed Consolidated Statement of Cash Flows For the nine months ended September 30, 2018 (in millions of Russian Roubles) Notes Nine months ended September 30, 2018 (unaudited) Nine months ended September 30, 2017 (unaudited) Cash flows from operating activities (Loss)/Profit before income tax (3,009) 4,130 Adjustments to reconcile (loss)/profit before income tax to cash flows: Depreciation and amortisation 7,254 6,641 Impairment losses on financial assets 47 44 Net (gain)/loss on financial assets and liabilities at fair value through profit or loss 15 (580) 20 Net loss on disposal of subsidiaries 40 15 Loss on disposal of property and equipment and intangible assets 39 2 Finance income (381) (349) Finance expenses 16 15 Dividend revenue from venture capital investments (20) (9) Share of (profit)/loss of equity accounted associates 356 (16) Impairment losses related to equity accounted associates 273 Impairment of intangible assets 6 1,721 Net foreign exchange gain (606) (673) Share-based payment expense 2,884 1,686 Other non-cash items 45 (44) Net loss on venture capital investments 23 27 Working capital adjustments: (Increase)/decrease in accounts receivable (527) 110 Decrease in prepaid expenses and advances to suppliers 468 628 Increase in other assets (249) (66) Increase/(decrease) in accounts payable and accrued expenses 1,307 (124) (Increase)/decrease in other non-current assets (149) 534 Increase in deferred revenue 4,055 2,472 Increase in financial assets at fair value through profit or loss 15 (2,337) (193) Operating cash flows before interest and income taxes 10,397 15,123 Dividends received from venture capital investments 20 8 Interest received 402 324 Interest paid (13) (15) Income tax paid (2,152) (2,743) Net cash provided by operating activities 8,654 12,697 Cash flows from investing activities Cash paid for property and equipment (3,264) (2,074) Cash paid for intangible assets (1,244) (1,399) Dividends received from equity accounted associates 40 18 Loans issued (70) Cash paid for acquisitions of subsidiaries, net of cash acquired 5 (8,031) (2,769) Proceeds from disposal of subsidiaries, net of cash disposed (20) (43) Cash paid for investments in equity accounted associates 5 (1,766) (640) Issuance of loans receivable (3) Net cash used in investing activities (14,355) (6,910) Cash flows from financing activities Loans repaid (122) Cash paid for treasury shares (1,430) Net cash used in financing activities (1,552) Net increase/(decrease) in cash and cash equivalents (5,701) 4,235 Effect of exchange differences on cash balances 409 (30) Cash and cash equivalents at the beginning of the period 15,371 5,513 Cash and cash equivalents at the end of the period 10,079 9,718 Mail.Ru Interim Results 2018 6

Interim Condensed Consolidated Statement of Changes in Equity For the nine months ended September 30, 2017 (in millions of Russian Roubles) Share capital Number of shares issued and outstanding Amount Share premium Treasury shares Retained earnings Accumulated other comprehensive income (net of tax effect of 0) Total equity attributable to equity holders of the parent Non-controlling interests Balance at January 1, 2017 (audited) 208,634,437 51,758 (1,290) 112,415 470 163,353 64 163,417 Profit for the period 3,099 3,099 13 3,112 Other comprehensive loss Foreign currency translation (295) (295) (295) Total other comprehensive loss (295) (295) (295) Total comprehensive income/(loss) 3,099 (295) 2,804 13 2,817 Share-based payment transactions 1,293 1,293 1,293 Exercise of RSUs and options over the shares of the Company 4,553,693 (2,220) 2,220 Acquisition of treasury shares (857,736) (1,430) (1,430) (1,430) Effect of disposal of subsidiary 13 13 13 Balance at September 30, 2017 (unaudited) 212,330,394 50,831 (500) 115,514 188 166,033 77 166,110 Total equity Mail.Ru Interim Results 2018 7

Interim Condensed Consolidated Statement of Changes in Equity (continued) For the nine months ended September 30, 2018 (in millions of Russian Roubles) Share capital Number of shares issued and outstanding Amount Share premium Treasury shares Retained earnings Accumulated other comprehensive income (net of tax effect of 0) Total equity attributable to equity holders of the parent Non-controlling interests Balance at January 1, 2018 212,424,794 51,722 (444) 114,676 128 166,082 84 166,166 Profit/(loss) for the period (3,524) (3,524) 25 (3,499) Other comprehensive loss Foreign currency translation (203) (203) (203) Total other comprehensive loss (203) (203) (203) Total comprehensive income/(loss) (3,524) (203) (3,727) 25 (3,702) Share-based payment transactions 2,961 2,961 2,961 Exercise of RSUs and options over the shares of the Company 1,652,542 (158) 158 Acquisitions of non-controlling interests in business combinations (Note 5) 310 310 Balance at September 30, 2018 (unaudited) 214,077,336 54,525 (286) 111,152 (75) 165,316 419 165,735 Total equity Mail.Ru Interim Results 2018 8

Notes to the Interim Condensed Consolidated Financial Statements For the nine months ended September 30, 2018 (in millions of Russian Roubles) 1 Corporate information and description of business These interim condensed consolidated financial statements of Mail.Ru Group Limited (hereinafter the Company ) and its subsidiaries (collectively the Group ) for the nine months ended September 30, 2018 were authorised for issue by the directors of the Company on October 24, 2018. The Company was registered on May 4, 2005 in the Territory of the British Virgin Islands ( BVI ), pursuant to the International Business Companies Act (the Act ), Cap. 291. The principal office of the Company is at 232 28th October Street, Office 501, 3035 Limassol, Cyprus. The Company consolidates or participates in businesses that operate in the Internet segment, including portals, social networking and communications, cybersport, e-commerce, online marketplaces, massively multiplayer online games ( MMO games ), social and mobile games. The Group and its associates have leading positions in Russia and other CIS states where they are present. 2 Basis of preparation The interim condensed consolidated financial statements for the nine months ended September 30, 2018 have been prepared in accordance with IAS 34. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group s annual financial statements for the year ended December 31, 2017 prepared in accordance with IFRS. 2.1 Application of new and amended IFRS and IFRIC The accounting policies adopted are consistent with those followed in the preparation of the Group s annual financial statements for the year ended December 31, 2017, except for the adoption of new standards as of January 1, 2018 listed below applicable to the Group: IFRIC Interpretation 22 Foreign Currency Transactions and Advance Considerations The Interpretation clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the de-recognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognizes the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine a date of the transactions for each payment or receipt of advance consideration. This Interpretation does not have any impact on the Group s consolidated financial statements. Amendments to IFRS 2 Classification and Measurement of Share-based Payment The IASB issued amendments to IFRS 2 Share-Based Payment that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligations; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if elected for all three amendments and other criteria are met. The Group s accounting policy for cash-settled share share-based payments is consistent with the approach clarified in the amendments. In addition, the Group has no share-based payment transactions with net settlement features for withholding tax obligations and did not make any modifications to the terms and conditions of its share-based payment transactions. Therefore, these amendments do not have any impact on the Group s consolidated financial statements. Amendments to IAS 28 Investments in Associates and Joint-Ventures Clarification that measuring investees at fair value through profit and loss is an investment-by-investment choice The amendments clarify that an entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit and loss. If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by the investment entity associate or joint venture to the investment entity associate s or joint venture s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent. These amendments do not have any impact on the Group s consolidated financial statements Recently adopted accounting pronouncements IFRS 15 was issued in May 2014, and amended in April 2016, and establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The Group adopted the new revenue standard as of January 1, 2018 using the full retrospective approach. See Note 11 Revenue for further details. IFRS 9 replaces IAS 39 for annual periods on or after January 1, 2018. The Group has adopted the new standard retrospectively from January 1, 2018 and has not restated comparative information for 2017 with respect to financial instruments in the scope of IFRS 9. IFRS 9 addresses the classification, measurement and de-recognition of financial assets and financial liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets. However, application of the new requirements has had no significant impact on the Group s statement of financial position or equity. See Note 15 Financial instruments for further details. Mail.Ru Interim Results 2018 9

3 Seasonality of operations Due to the seasonal nature of advertising and online games, higher revenues and operating profits are usually expected in the second half of the year than in the first six months. Higher sales during the second half of the year are mainly attributed to the fact that a large portion of advertising budgets is spent in the last quarter of the year and to the increased demand for online games due to the end of the vacation period. 4 Operating segments In reviewing the operational performance of the Group and allocating resources, the Chief Executive Officer of the Group, who is the Group s Chief Operating Decision Maker (CODM), reviews selected items of each segment s income statement, assuming 100% ownership in all of the Group s key operating subsidiaries, based on management reporting. Management reporting is different from IFRS, because it does not include certain IFRS adjustments which are not analysed by the CODM in assessing the core operating performance of the business. Such adjustments affect such major areas as revenue recognition, deferred tax on unremitted earnings of subsidiaries, share-based payments, disposal or impairment of investments, business combinations, fair value adjustments, amortisation and impairment thereof, net foreign exchange gains and losses, share in financial results of associates, as well as irregular nonrecurring items that occur from time to time and are evaluated for adjustment as and when they occur. The tax effect of these adjustments is also excluded from management reporting. The financial information of the key subsidiaries acquired during the reporting period or after the reporting period but prior to the date of these consolidated financial statements is included into the segment disclosure starting from the beginning of the earliest comparative period included in the financial statements. The financial information of subsidiaries disposed of and assets classified as held for sale prior to the date of these consolidated financial statements is excluded from the segment presentation starting from the beginning of the earliest period presented. Accordingly, segment reporting for the three and nine months ended September 30, 2018 and the respective comparative segment financial information has been retrospectively adjusted, as applicable, to include the financial information of ZakaZaka, ESforce (Note 5). Am.ru and to exclude Pandao (Note 16) all starting from January 1, 2017. The Group has identified its operating segments based on the types of products and services the Group offers. The Group has identified the following reportable segments on this basis: Email, Portal and IM; VK (Vkontakte); Social Networks (excluding VK); Online Games; and E-Commerce, Search and Other Services. The Email, Portal and IM segment includes email, instant messaging and portal (main page and media projects). It earns substantially all revenues from display and context advertising. The VK segment includes the Group s social network Vkontakte (VK.com) and earns revenues from (i) commission from application developers based on the respective applications revenue, (ii) user payments for virtual gifts, stickers and music subscriptions and (iii) online advertising, including display and context advertising. The Social Networks (excluding VK) segment includes the Group s two other social networks (OK and My World) and earns revenues from (i) user payments for virtual gifts and music subscriptions, (ii) commission from application developers based on the respective applications revenue, and (iii) online advertising, including display and context advertising. OK and My World have been aggregated into a single operating segment as they have similar economic characteristics and provide similar services to similar customers in similar markets. The Online Games segment includes online gaming services, including MMO, social and mobile games. It earns substantially all revenues from (i) sale of virtual in-game items to users and (ii) royalties for games licensed to third-party online game operators. The E-Commerce, Search and Other Services reportable segment represents separate operating segments aggregated in one reportable segment for presentation purposes only and primarily consists of search engine services earning substantially all revenues from context advertising, food delivery services earning substantially all revenue from restaurant's commission and our ESforce esports business earning substantially all revenues from sponsorship and other advertising. This segment also includes the Group s Youla classifieds business which is currently not earning material revenues, and a variety of other services, which are considered insignificant by the CODM for the purposes of performance review and resource allocation. The Group measures the performance of its operating segments through a measure of earnings before interest, tax, depreciation and amortisation (EBITDA). Segment EBITDA is calculated as the respective segment s revenue less operating expenses (excluding depreciation and amortisation and impairment of intangible assets), including Group corporate expenses allocated to the respective segment. Mail.Ru Interim Results 2018 10

4 Operating segments (continued) EBITDA is not a measure of financial performance under IFRS. The calculation of EBITDA by the Group may be different from the calculations of similarly labeled measures used by other companies and it should therefore not be used to compare one company against another or as a substitute for analysis of the Group s operating results as reported under IFRS. EBITDA is not a direct measure of the Group s liquidity, nor is it an alternative to cash flows from operating activities as a measure of liquidity, and it needs to be considered in the context of the Group s financial commitments. EBITDA may not be indicative of the Group s historical operating results, nor is it meant to be predictive of the Group s potential future results. The Group believes that EBITDA provides useful information to the users of the consolidated financial statements because it is an indicator of the strength and performance of the Group s ongoing business operations, including the Group s ability to fund discretionary spending such as capital expenditure, acquisitions and other investments and the Group s ability to incur and service debt. The information about the breakdown of revenue from external customers by the customers country of domicile and non-current assets by country is not available to the management of the Group, and it considers that the cost to develop such information would be excessive. The income statement items for each segment for the nine months ended September 30, 2018, as presented to the CODM, are presented below: Email, Portal and IM Social Networks (ex VK) Online Games VK E-commerce, Search and other Eliminations Group Revenue External revenue 3,964 11,840 17,096 12,995 5,224 51,119 Intersegment revenue 1 2 2 32 85 (122) Total revenue 3,965 11,842 17,098 13,027 5,309 (122) 51,119 Total operating expenses 2,664 5,027 15,382 5,601 9,358 (122) 37,910 EBITDA 1,301 6,815 1,716 7,426 (4,049) 13,209 Net profit 6,993 The income statement items for each segment for the nine months ended September 30, 2017, as presented to the CODM, are presented below (all numbers include the effect of IFRS 15 adoption please see Note 11 for details): Email, Portal and IM Social Networks (ex VK) Online Games VK E-commerce, Search and other Eliminations Group Revenue External revenue 3,511 11,607 12,309 8,301 3,667 39,395 Intersegment revenue 3 32 135 291 (460) 1 Total revenue 3,514 11,639 12,309 8,436 3,958 (460) 39,396 Total operating expenses 2,171 4,162 8,998 2,522 8,671 (460) 26,064 EBITDA 1,343 7,477 3,311 5,914 (4,713) 13,332 Net profit 9,014 A reconciliation of group aggregate segment revenue, as presented to the CODM, to IFRS consolidated revenue of the Group for the nine months ended September 30, 2018 and 2017 is presented below: 2018 2017 Group aggregate segment revenue, as presented to the CODM 51,119 39,396 Adjustments to reconcile revenue as presented to the CODM to consolidated revenue under IFRS: Effect of difference in dates of acquisition, loss of control in subsidiaries and assets held for sale 51 (709) Differences in timing of revenue recognition (4,348) (2,336) Barter revenue 76 25 Dividend revenue from venture capital investments 20 9 Difference in classification of revenue (565) Consolidated revenue under IFRS 46,918 35,820 Mail.Ru Interim Results 2018 11

4 Operating segments (continued) A reconciliation of group aggregate segment EBITDA, as presented to the CODM, to IFRS consolidated profit before income tax expense of the Group for the nine months ended September 30, 2018 and 2017 is presented below: 2018 2017 Group aggregate segment EBITDA, as presented to the CODM 13,209 13,332 Adjustments to reconcile EBITDA as presented to the CODM to consolidated profit/(loss) before income tax expenses under IFRS: Effect of difference in dates of acquisition, loss of control in subsidiaries and assets held for sale (1,536) 775 Differences in timing of revenue recognition (3,961) (2,336) Net loss on venture capital investments (23) (27) Share-based payment transactions (2,884) (1,686) Other (13) 5 EBITDA 4,792 10,063 Depreciation and amortisation (7,254) (6,641) Impairment of intangible assets (1,721) Share of profit/(loss) of equity accounted associates (356) 16 Finance income 381 349 Finance expenses (16) (15) Other non-operating gain/(loss) 19 (7) Net gain/(loss) on derivative financial assets and liabilities at fair value through profit or loss 580 (20) Impairment losses related to equity accounted associates (273) Net loss on disposal of shares in subsidiaries (40) (15) Net foreign exchange gain 606 673 Consolidated profit/(loss) before income tax expense under IFRS (3,009) 4,130 A reconciliation of group aggregate net profit, as presented to the CODM, to IFRS consolidated net profit of the Group for nine months ended September 30, 2018 and 2017 is presented below: 2018 2017 Group aggregate segmet net profit, as presented to the CODM 6,993 9,014 Adjustments to reconcile net profit as presented to the CODM to consolidated net profit/(loss) under IFRS: Share-based payment transactions (2,884) (1,686) Differences in timing of revenue recognition (3,961) (2,336) Effect of difference in dates of acquisition, loss of control in subsidiaries and assets held for sale (1,554) 716 Amortisation of fair value adjustments to intangible assets (3,952) (4,003) Net gain/(loss) on financial instruments at fair value through profit or loss 557 (46) Net loss on disposal of shares in subsidiaries (40) (15) Net foreign exchange gain 606 673 Share of (loss)/profit of equity accounted associates (356) 16 Impairment losses related to equity accounted associates (273) Other (21) (5) Tax effect of the adjustments and tax on unremitted earnings 1,113 1,057 Consolidated net profit/(loss) under IFRS (3,499) 3,112 The income statement items for each segment for the three months ended September 30, 2018, as presented to the CODM, are presented below: Email, Portal and IM Social Networks (ex VK) Online Games VK E-commerce, Search and other Eliminations Group Revenue External revenue 1,465 3,706 6,136 4,420 2,022 17,749 Intersegment revenue 2 9 40 (51) Total revenue 1,465 3,706 6,138 4,429 2,062 (51) 17,749 Total operating expenses 917 1,618 5,806 1,908 3,202 (51) 13,400 EBITDA 548 2,088 332 2,521 (1,140) 4,349 Net profit 2,744 Mail.Ru Interim Results 2018 12

4 Operating segments (continued) The income statement items for each segment for the three months ended September 30, 2017, as presented to the CODM, are presented below (all numbers include the effect of IFRS 15 adoption please see Note 11 for details): Email, Portal and IM Social Networks (ex VK) Online Games VK E-commerce, Search and other Eliminations Group Revenue External revenue 1,175 3,531 4,427 3,041 1,231 13,405 Intersegment revenue 1 14 96 (111) Total revenue 1,175 3,532 4,427 3,055 1,327 (111) 13,405 Total operating expenses 722 1,449 3,369 893 2,993 (111) 9,315 EBITDA 453 2,083 1,058 2,162 (1,666) 4,090 Net profit 2,761 A reconciliation of group aggregate segment revenue, as presented to the CODM, to IFRS consolidated revenue of the Group for the three months ended September 30, 2018 and 2017 is presented below: 2018 2017 Group aggregate segment revenue, as presented to the CODM 17,749 13,405 Adjustments to reconcile revenue as presented to the CODM to consolidated revenue under IFRS: Effect of difference in dates of acquisition, loss of control in subsidiaries and assets held for sale 72 (190) Differences in timing of revenue recognition (1,573) (41) Barter revenue 65 8 Dividend revenue from venture capital investments 4 Consolidated revenue under IFRS 16,317 13,182 A reconciliation of group aggregate segment EBITDA, as presented to the CODM, to IFRS consolidated profit before income tax expense of the Group for the three months ended September 30, 2018 and 2017 is presented below: 2018 2017 Group aggregate segment EBITDA, as presented to the CODM 4,349 4,090 Adjustments to reconcile EBITDA as presented to the CODM to consolidated profit/(loss) before income tax expenses under IFRS: Effect of difference in dates of acquisition, loss of control in subsidiaries and assets held for sale (377) 171 Differences in timing of revenue recognition (1,433) (41) Share-based payment transactions (662) (450) Other 2 EBITDA 1,879 3,770 Depreciation and amortisation (2,431) (2,281) Impairment of intangible assets (23) Share of loss of equity accounted associates (224) Finance income 116 115 Other non-operating income 24 35 Net gain/(loss) on derivative financial assets and liabilities at fair value through profit or loss 185 (102) Impairment losses related to equity accounted associates (28) Net loss on disposal of shares in subsidiaries (40) Net foreign exchange gain 297 97 Consolidated profit/(loss) before income tax expense under IFRS (217) 1,606 Mail.Ru Interim Results 2018 13

4 Operating segments (continued) A reconciliation of group aggregate net profit, as presented to the CODM, to IFRS consolidated net profit of the Group for three months ended September 30, 2018 and 2017 is presented below: 2018 2017 Group aggregate segment net profit, as presented to the CODM 2,744 2,761 Adjustments to reconcile net profit as presented to the CODM to consolidated net profit/(loss) under IFRS: Share-based payment transactions (662) (450) Differences in timing of revenue recognition and classification (1,433) (41) Effect of difference in dates of acquisition, loss of control in subsidiaries and assets held for sale (369) 171 Amortisation of fair value adjustments to intangible assets (1,296) (1,363) Net gain/(loss) on financial instruments at fair value through profit or loss 185 (102) Net foreign exchange gain 297 97 Share of loss of equity accounted associates (224) Impairment losses related to equity accounted associates (28) Other (50) (10) Tax effect of the adjustments and tax on unremitted earnings 546 398 Consolidated net profit/(loss) under IFRS (262) 1,433 5 Business combinations 5.1 ZakaZaka In May 2017, as a result of a number of transactions, the Group completed the acquisition of 100% of Site-Agregator LLC ( ZakaZaka ), the number two food delivery company in Russia, for a cash consideration of RUR 1,042. The main purpose of the acquisition was further expansion of the Group s food delivery business. During Q2 2018 the Group finalised purchase price allocation for ZakaZaka acquisition. The fair values of the identifiable assets and liabilities of ZakaZaka at the date of acquisition were as follows: Other intangible assets 197 Trade accounts receivable 18 Prepaid expenses and advances to suppliers 13 Other current assets 18 Cash and cash equivalents 24 Total assets 270 Deferred income tax liabilities 35 Trade accounts payable 5 Other payables, provisions and accrued expenses 7 Total liabilities 47 Total net assets 223 Goodwill on the transaction was calculated as the excess of: (a) the consideration transferred by the Group measured at fair values: [1] cash paid 1,027 [2] the acquisition date fair value of the Group s previously held equity interest 120 Consideration transferred by the Group 1,147 Over (b) financial liabilities at fair value through profit or loss derivative over the equity of investee 246 (c) the net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed measured in accordance with IFRS 3R 223 Goodwill 678 Fair value Goodwill is mainly attributable to expected synergies and cost savings with the Group s food delivery business. Goodwill is not expected to be deductible for income tax purposes. Goodwill is allocated to Delivery Club CGU. Intangible assets mainly include trademark and customer base, and are amortised over the period of 2 to 10 years. Mail.Ru Interim Results 2018 14

5 Business combination (continued) 5.1 ZakaZaka (continued) The cash flows on acquisition were as follows: Cash paid (included in cash flows from investing activities) 1,042 Cash acquired (included in cash flows from investing activities) (24) Net cash flow on acquisition 1,018 The net assets recognised in the December 31, 2017 financial statements were based on a provisional assessment of their fair value. In 2018, the valuation of the brand name was updated and the acquisition date fair value of other intangible assets was RUR 197, an increase of RUR 127 over the provisional value. The 2017 comparative information was restated to reflect the adjustment to the provisional amounts. As a result, there was an increase in the deferred tax liability of RUR 25. There was also a corresponding reduction in goodwill of RUR 102, resulting in RUR 678 of total goodwill arising on the acquisition. The increased amortisation charge on the other intangible assets from the date of acquisition to December 31, 2017 was not material. 5.2 ESforce In January 2018 the Group acquired a leading esport group of companies operating under the ESforce brand (together ESforce ) for a cash consideration of RUR 5,659 and contingent consideration, measured at fair value, of RUR 1,132 based on ongoing financial KPIs in a period of 1 year (Note 10). The primary purpose of the acquisition of ESforce was to enhance the Group s position on the esports market. Provisional fair values of the identifiable assets and liabilities as at the date of acquisition were as follows: Provisional fair value Property and equipment 648 Other intangible assets 674 Deferred income tax assets 301 Trade accounts receivable 191 Prepaid income tax 12 Prepaid expenses and advances to suppliers 23 Other current assets 142 Other non-current assets 9 Cash and cash equivalents 207 Total assets 2,207 Deferred income tax liabilities 119 Trade accounts payable 235 VAT and other taxes payable 12 Deferred revenue and customer advances 68 Provisions for tax contingencies 128 Other payables and accrued expenses 130 Total liabilities 692 Total net assets 1,515 Goodwill on the transaction was calculated as the excess of: (a) the consideration transferred by the Group measured at fair values: [1] Cash paid 5,659 [2] Contingent consideration liability 1,132 Consideration transferred by the Group 6,791 (b) the amount of non-controlling interest in ESForce measured in accordance with IFRS 3 22 over (с) the net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed measured in accordance with IFRS 3 1,515 Goodwill 5,298 Goodwill is mainly attributable to the potential of ESforce to further enhance its leadership position in the esports market, as well as the prospects of potential synergies with the Group s other operations. Goodwill is not expected to be deductible for income tax purposes. Intangible assets mainly include trademark and customer base, and are amortised over the period of 2 to 5 years. Mail.Ru Interim Results 2018 15

5 Business combination (continued) 5.2 ESforce (continued) The cash flows on acquisition were as follows: Cash paid (included in cash flows from investing activities) 5,730 Cash acquired (included in cash flows from investing activities) (207) Net cash flow on acquisition 5,523 5.3 BitGames, 33 Slona and InShopper In April 2018 the Group acquired control in mobile games developer PBL Bitdotgames Publishing Limited ( BitGames ) by increasing its share to 51% (49% in addition to 2% stake as of March 31, 2018). The primary purpose of the acquisition of BitGames was to enhance the Group s position on mobile games market. Also in April 2018 the Group completed the acquisition of the 100% in LLC 33 Slona and LLC Tekhnologii nedvizhimosti (collectively, 33 Slona ), a digital real estate agency. The primary purpose of the acquisition of 33 Slona was to leverage the Group s expertise and resources by achieving substantial synergies with Youla, the Group s general online classifieds product. In June 2018 the Group completed the acquisition of the 100% in Consult Universal Corp ( InShopper ), a cash-back technology provider. The primary purpose of the acquisition of InShopper was to leverage the Group s expertise and resources by achieving substantial synergies with Group s payment technologies and solutions. Total cash consideration for the transactions above was RUR 2.5 bln and contingent consideration, measured at fair value, of RUR 93 (based on ongoing financial KPIs in a period of 1 year (Note 10). In accounting for the business combinations, the Group has provisionally determined the amounts of the acquired companies identifiable assets and liabilities at their fair value. The acquisition accounting will be finalised upon completion of the tax planning and valuation of BitGames, 33 Slona and InShopper s assets and liabilities. The provisional fair values of the identifiable assets and liabilities of BitGames, 33 Slona and InShopper at the date of acquisition were as follows: Provisional fair value Other intangible assets 1,140 Loans receivable 5 Deferred income tax assets 47 Prepaid expenses and advances to suppliers 14 Trade accounts receivable 36 Other current assets 36 Cash and cash equivalents 26 Total assets 1,304 Deferred income tax liabilities 143 Trade accounts payable 83 Deferred revenue and customer advances 376 Loans payable 33 VAT and other taxes payable 5 Other payables and accrued expenses 11 Total liabilities 651 Total net assets 653 Goodwill on the transaction was calculated as the excess of: (a) the consideration transferred by the Group measured at fair values: [1] cash paid 2,515 [2] financial assets at fair value through profit or loss derivative over the equity of investee 11 [3] the acquisition date fair value of the Group s previously held equity interest 110 [4] contingent consideration liability 93 Consideration transferred by the Group 2,729 (b) the amount of non-controlling interest measured in accordance with IFRS 3 288 Over (с) the net of the acquisition date amounts of the identifiable assets acquired and the liabilities assumed measured in accordance with IFRS 3 653 Goodwill 2,364 Mail.Ru Interim Results 2018 16

5 Business combination (continued) 5.3 BitGames, 33 Slona and InShopper (continued) Goodwill is mainly attributable to development of new games, cost saving and potential synergy with the Group s classified business, payment solutions and other operations. Goodwill is not expected to be deductible for income tax purposes. Goodwill related to BitGames and 33 Slona acquisition is allocated to Games and Youla CGUs correspondingly. Management is still assessing the allocation of InShopper goodwill among cash generating units. Intangible assets mainly include social and mobile games and are amortised over the period of 2 to 5 years. The cash flows on acquisition were as follows: Cash paid (included in cash flows from investing activities) 2,534 Cash acquired (included in cash flows from investing activities) (26) Net cash flow on acquisition 2,508 5.4 Citymobil In April 2018 as a result of a number of transactions the Group acquired a 25.38% stake in taxi aggregator City-Mobil LLC ( Citymobil ) for a total cash consideration of RUR 530 mln, including RUR 120 conversion of loan (Note 15). The Group concluded that it has significant influence over Citymobil as the Group has the power to participate in the financial and operating policy decisions through its representation on Citymobil s Board of Directors. The Group s ownership interest in Citymobil represents an investment in an associate and is accounted for under the equity method. The acquisition of investment in Citymobil is accounted for based on provisional values, as the Group has not completed the allocation of purchase price over the fair values of Citymobil s identifiable assets and liabilities as of the date of these financial statements. 5.5 UMA In May 2018 the Group exercised its call option to purchase 20% of the share capital of the music library rights holder Salerton Investments Limited ( UMA ) for a total cash consideration of RUR 1,363. The Group concluded that it has significant influence over UMA as it is represented on UMA s board of directors and is entitled to participate in decision making regarding its financial and operating policies. Therefore UMA is accounted for as an associate under the equity method. The acquisition of investment in UMA is accounted for based on provisional values as the Group has not completed the allocation of purchase price over the fair values of UMA s identifiable assets and liabilities as of the date of these financial statements. 6 Other intangible assets During the nine months ended September 30, 2018, the Group capitalised software development costs and otherwise acquired intangible assets with a cost of RUR 1,054 (2017: RUR 991). Because of a significant downward revision of the forecasted cash inflows of the game Armored Warfare in Q2 2018, the Group fully impaired the game, recording an impairment charge of RUR 1,698. 7 Property and equipment During the nine months ended September 30, 2018, the Group acquired property and equipment with a cost of RUR 3,392 (2017: RUR 2,090). 8 Other non-current assets Other non-current assets consist of the following: September 30, 2018 December 31, 2017 Advance under office lease contract 354 316 Advances for royalties 1,143 1,022 Other non-current assets 328 247 Total other non-current assets 1,825 1,585 Mail.Ru Interim Results 2018 17

9 Other current assets Other current assets consist of the following: September 30, 2018 December 31, 2017 Inventory 26 26 VAT receivable 442 146 Other current assets 221 29 Total other current assets 689 201 10 Other payables and accrued expenses Other payables and accrued expenses consist of the following: September 30, 2018 December 31, 2017 Payables to personnel 1,612 1,724 Accrued vacations 927 774 Accrued professional consulting expenses 39 35 Payables under lease contract 55 121 Contingent consideration liability (Note 5) 1,405 Other current payables and provisions 322 248 Total other payables and accrued expenses 4,360 2,902 11 Revenue On January 1, 2018, the Group adopted new revenue accounting standard IFRS 15. The new revenue standard superseded all current revenue recognition requirements under IFRS. The Group adopted the new standard on the required effective date using the full retrospective method and hence adjusting each financial statement line item affected for the period immediately preceding the first period for which this Standard is applied. Adopting IFRS 15, the Group is considering the following: (a) Principal versus agent considerations The Group enters into arrangements where services are rendered to end-customers with an involvement of third parties. Under these arrangements, the Group provides mainly display advertising and some other services in social communities which are controlled by third parties but are operated on the Group s platforms. Under these arrangements the Group is not considered to have control over these advertising services. At the same time social communities have full discretion in providing access to advertising space in social communities which they control and establish prices for the placing of advertisements. Previously the Group concluded that it is a principal after evaluating the indicators in order to make its principal versus agent determination when from the perspective of the advertisers the Group renders these services, and hence the Group has exposure to the significant risks (including credit risk) and rewards associated with placing advertisements and accounted for these arrangements as a principal. IFRS 15 requires the Group to assess whether it controls a specified good or service before it is transferred to the customer. The Group has determined that it does not control advertising services before these services are transferred to end customers, as the Group does not control the social communities where these advertisements are placed, and hence, is an agent rather than a principal in these contracts. The effect of IFRS 15 adoption on the comparative period ended September 30, 2017 is presented below. The adoption of IFRS 15 did not have any impact on the statement of financial position and retained earnings: Description As restated IFRS 15 adoption effect As reported prior to the adoption of IFRS 15 Online advertising 15,161 947 16,108 Community IVAS 9,798 272 10,070 Total Revenue effect n/a 1,219 n/a Agent/Partner fees (6,279) (1,219) (7,498) EBITDA effect n/a n/a Mail.Ru Interim Results 2018 18

11 Revenue (continued) (b) Presentations and disclosures The presentation and disclosure requirements in IFRS 15 are more detailed than under previous standard. As required for condensed interim financial statements for disaggregation of revenue from contracts with customers for the nine months ended September 30, 2018, based on the Group s segment reporting (Note 4) is presented below: Email, Portal and IM Social Networks (ex VK) Online Games VK E-commerce, Search and other Eliminations Group Revenue External revenue 3,964 11,840 17,096 12,995 5,224 51,119 Intersegment revenue 1 2 2 32 85 (122) Total revenue 3,965 11,842 17,098 13,027 5,309 (122) 51,119 Services transferred at a point in time 3,884 7,887 801 11,570 5,247 (122) 29,267 Services transferred over time 81 3,955 16,297 1,457 62 21,852 Disaggregation of revenue from contracts with customers for the nine months ended September 30, 2017 for, based on the Group s segment reporting (Note 4) is presented below: Email, Portal and IM Social Networks (ex VK) Online Games VK E-commerce, Search and other Eliminations Group Revenue External revenue 3,511 11,607 12,309 8,301 3,667 39,395 Intersegment revenue 3 32 135 291 (460) 1 Total revenue 3,514 11,639 12,309 8,436 3,958 (460) 39,396 Services transferred at a point in time 3,426 6,876 64 7,892 3,908 (460) 21,706 Services transferred over time 88 4,763 12,245 544 50 17,690 Disaggregation of revenue from contracts with customers for the three months ended September 30, 2018, based on the Group s segment reporting (Note 4) is presented below: Email, Portal and IM Social Networks (ex VK) Online Games VK E-commerce, Search and other Eliminations Group Revenue External revenue 1,465 3,706 6,136 4,420 2,022 17,749 Intersegment revenue 2 9 40 (51) Total revenue 1,465 3,706 6,138 4,429 2,062 (51) 17,749 Services transferred at a point in time 1,439 2,728 357 3,909 2,035 (51) 10,417 Services transferred over time 26 978 5,781 520 27 7,332 Disaggregation of revenue from contracts with customers for the three months ended September 30, 2017 for, based on the Group s segment reporting (Note 4) is presented below: Email, Portal and IM Social Networks (ex VK) Online Games VK E-commerce, Search and other Eliminations Group Revenue External revenue 1,175 3,531 4,427 3,041 1,231 13,405 Intersegment revenue 1 14 96 (111) Total revenue 1,175 3,532 4,427 3,055 1,327 (111) 13,405 Services transferred at a point in time 1,145 2,319 26 2,900 1,290 (111) 7,569 Services transferred over time 30 1,213 4,401 155 37 5,836 Mail.Ru Interim Results 2018 19

11 Revenue (continued) Revenue recognition accounting policy The Group generates revenue primarily from online advertising, MMO games and Community IVAS. Contract assets are comprised of trade receivables as a separate line item in the statement of financial position. Contract liabilities are comprised of deferred revenue and customer advances presented as separate line items in the statement of financial position. Online advertising Online advertising consists primarily of display advertising and context advertising. Display advertising revenue is recognised as the services are provided (i.e., as per page view for dynamic banners and over the contractual term for static banners). For display advertising sold through some third party advertising agencies, revenue generally is recognised net of any portion attributable to the third parties. The Group earns revenues for search context advertising through partnerships with third parties. Context advertising revenue is recognised as the services are provided (i.e., upon click-through, which is when a user clicks on an advertiser s listing) on a net basis. Context advertising also includes revenue from the Group s mytarget self-serve advertising technology ( target advertising ). Revenue from payper-click advertisements is recognised upon click-through, while revenue from pay-per-view advertisements is recognised as the advertisements are viewed. Context advertising also includes revenue related to the placement of target advertising, display advertising and advertising through integration in applications, advertising thought offers on the Group s websites and in applications, advertising via networks comprising advertising banners placement on third party websites and advertising on the pages of communities within the Group s social networks. The revenue from advertising in applications, on the web pages of communities and via networks is recognised on a gross basis with costs and commissions paid to third party owners and administrators of websites, applications, platforms and communities recognised in Agent/partner fees. Certain customers may receive cash-based incentives or credits, which are accounted for as variable consideration. The Group estimates these amounts based on the expected amount to be provided to customers and reduce revenues recognised. MMO Games The Group derives its online game revenue from in-game virtual items representing additional functionality and features for the game players characters purchased by game players to play the Group s MMO games and casual games. The amounts of cash or receivables from payment systems for cash from the users, net of related short messaging service operator commissions, are not recognised as revenues and are credited to deferred revenue. Under the item-based revenue model, revenues are recognised over the life of the in-game virtual items that game players purchase or as the ingame virtual items are consumed. The estimated life span of in-game items is determined based on historical player usage patterns and playing behaviour. The Group enters into licensing arrangements with overseas licensees to operate the Group s games in other countries and regions. These licensing agreements provide two separate elements, each having commercial substance: the initial non-refundable fees and the usage-based royalty fees. The initial non-refundable payment represents the license for the game and is recognised as license revenue immediately once the games are launched into commercial use by the licensees. Ongoing usage-based royalties determined based on the amount of money charged to the players accounts or services payable by players in a given country or region to the licensees are recognised when they are earned, provided that the collection is probable. Community IVAS The Group derives Community IVAS revenues through certain communication products, where users pay a fee for the paid content and online services, mainly through social networking web sites and through the commission from third party developers of the various applications placed on social networking web sites. The fees for such services are collected from customers using various payment channels, including bank cards, online payment systems and mobile operators and from the applications developers. The mobile network operators collect fees for such services from their customers, usually through mobile short message services ( SMS ), and pass such fees to the Group. Revenues from third party applications and developers on the Group s platforms are recognised net of commission to mobile operators and any portion attributable to the developer of the application, at the time when customer payment is due. Other revenue Other revenues primarily consist of food delivery, e-learning, non-advertising b2b big data services, database software implementation and support services, listing fees and dividends from venture investments. Food delivery revenue consists substantially from restaurant s commission for respective services rendered by the Group. Commission is charged for each order delivered to final customers of restaurant who pay upon delivery of food. Revenue from delivery services is recognised when a customer s order is completed. Mail.Ru Interim Results 2018 20